Cadence: Sustainable by Design

Last week, Cadence published the Cadence Sustainability Report 2021 (link at the end of this post). As our CEO, Anirudh Devgan, says in the foreword:

Our products enable the world’s leading electronics providers to optimize power, space, and energy needs for the most dynamic market applications, including consumer, hyperscale computing, 5G communications, automotive, mobile, aerospace, industrial, and healthcare. It is our culture of innovation that drives our socially responsible business practices and supports the long-term success of our company, employees, and communities.

We are actually in a special position regarding sustainability. Obviously, we can do some of the things any company can do. Also, I'm sure we reduced our consumption of fuel dramatically over the last two years since many of us have been "work from home" during much of that period, even if Amazon has been doing extra driving on our behalf. But it would be a stretch to say we deliberately planned it, and although the pandemic has been good for the electronics industry, semiconductors, and EDA, that doesn't make it a good thing for society as a whole. However, what is good for society as a whole is reducing the amount of energy we consume, and that is where our superpowers come in.

The special thing we can do is to reduce the energy consumption of a lot of other companies indirectly by providing the tools and IP that they need to optimize their designs and cut the power consumption of their products. And some of the reduction has been dramatic. In my post, Thermal in Data Centers, I pointed out the remarkable fact that:

The total power consumed by data centers globally is something like 200TWh/year. But that is not much different from a decade ago. However, new results from the bottom-up perspective indicate otherwise: Despite rapid growth in demand for information services over the past decade, global data center energy use likely rose by only 6 percent between 2010 and 2018. 

The report puts it in more formal language:

Electronic Design Automation (EDA), in combination with advances in semiconductor technology, holds the power consumption of electronics within acceptable levels while enabling significant performance increases. Cadence is a pivotal leader in electronic design and applies its underlying Intelligent System Design strategy to deliver software, hardware, and IP that turn design concepts into reality. Our customers, the world’s most innovative companies delivering extraordinary electronic products from chips to boards to systems, use Cadence technology to design sustainable innovation that optimizes power, space, and energy needs of end products for the most dynamic market applications, including consumer, hyperscale computing, 5G communications, automotive, mobile, aerospace, industrial, and healthcare.

I don't want to leave the impression that it is all about power. Advanced Driver Assistance System (ADAS) in automotive has reduced accidents significantly, and in the rest of the decade, autonomy is likely to further reduce the impact of automobiles. Smartphones have changed all of our lives dramatically since they were introduced just 14 years ago...one of the fastest rates of adoption of any product ever. Now everyone has the entire world's knowledge in their pocket. It is easy to forget how fast this has happened. My stepdaughter (vintage 1995) found it hard to believe that before there were smartphones, we actually used paper maps. She has never even seen a paper roadmap, or even those driving instructions we used to have to print out before going on a trip in the era between paper maps and smartphones with GPS.

Reading the whole report is quite an undertaking since it is nearly 100 pages long. To give you an idea of the scope, here is the table of contents:

• Letter from Our CEO 3
• About Cadence 4
• About the Report 6
• 2021 Highlights 9
• Progress on our 2021 Environmental, Social, and Governance Strategies 10
• Innovation 15
• Environmental Stewardship 25
• Workforce: Accelerating Innovation as One Team 35
• Governance 53
• Privacy and Cybersecurity: Managing Risks of Secure Data 61
• Responsible Supply Chain 65
• Community Outreach 71
• Awards and Recognition 77
• GRI Index 81
• SASB Index 95

I am not going to attempt to do some sort of instant summary of the whole thing—you can read the sections that interest you. Here's a bit about the report itself:

The purpose of this report is to share with our stakeholders the progress we made in our environmental, social, and governance (ESG) strategies in 2021. The content of this report is informed by feedback from our key stakeholders: employees, investors, customers, and industry partners and associations.
...
Further, we conducted a benchmark analysis of industry peers. While we address sustainability issues across the materiality spectrum, our cross-functional team identified the following topics as particularly significant to our company in our latest materiality assessment:

• Innovation
• Environmental Impact
• Governance & Ethical Business Practices
• Environmental
• Social
• Workforce
• Responsible Supply Chain
• Governance

Privacy and Cybersecurity: Managing Risks of Secure Data

There are lots of things in the report that you would expect to find, like recycling electronic products at the end of their life. But one that is less obvious is one of the areas that I write about quite a bit here on Breakfast Bytes. We need to do the obvious things like looking after our data security. As it says in the report:

Our products and services involve storage, including cloud-based storage, and transmission of our proprietary information and that of our customers.

With offices throughout the world, including key research and development locations outside of the United States, our business continuity is dependent upon the connectivity of our global operations and is subject to a number of risks summarized in our periodic reports filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K.

Our Information Security team works to identify and prevent risks to the security of protected data we collect. Our Chief Information Security Officer administers our data privacy and cybersecurity program, with oversight from the Audit Committee of the Board of Directors. We regularly update our Board of Directors on our performance and risk profile.

In 2021, with a vast majority of employees continuing to work from home during the COVID-19 pandemic, we maintained our focus on providing secure remote access with endpoint security controls and infrastructure resiliency. We enhanced our verification controls to further protect our network from unauthorized access and we utilized cybersecurity incident response procedures to address risks specific to remote working conditions.

But this is another area where Cadence has a superpower. We also provide IP, tools, and software to allow our customers to build cybersecurity into their products. If this year stood out for anything in this area, it would be supply-chain attacks, starting with SolarWinds in January last year, and ending with Log4J in December, with the Colonial Pipeline in between (real supply chain, not just software supply chains). We are in all of our customers' supply chains and our tools and IP are "inside" their products, in a sense. Our own security is just a starting point, we need to ensure that our products are not compromised.

Learn More

Read the full Cadence Sustainability Report 2021.

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